Governments disappointed the world in Copenhagen at the end of 2009 by failing to produce a global agreement that would mandate reductions of carbon emissions in accord with recommendations of climate scientists. Ever since there has been a mood of despair about addressing the challenges posed by global warming.

The intense lobbying efforts by climate deniers, reinforced in the United States by a right wing anti-government tsunami that has paralyzed Congress, succeeded in blocking even modest market-based steps to induce energy efficiency. This bleak picture raises daunting biopolitical questions about whether the human species possesses a sufficient will to survive given its persisting inability to respond to the climate change challenge despite well-evidenced warnings about the consequences of a failure to do so. Less apocalyptically, this pattern of inaction makes us wonder whether a state-centric structure of world order can surmount the limits of national interests to undertake policies that promote the human interest in relation to global warming.

International experience shows that where the interests of important states converge, especially if complemented by the interests of business and finance, collective initiatives upholding human interests can be implemented. The international regulation of ozone depletion, the public order of the oceans, the avoidance of international conflict in Antarctica, and the protection of some endangered marine species, such as whales, are illustrative of what is possible when a favorable lawmaking and compliance atmosphere exists. This record of regulation on behalf of the global common good are examples of success stories that make international law seem more worthwhile than media cynics and influential political realists acknowledge. Yet in relation to the climate change agenda, despite the strong, even stridently avowed, consensus among climate scientists (at about the 97% level), the dynamics of forging the sort of agreement that will keep global warming within prudent and manageable limits has not materialized.

Such a world order failure is imposing serious costs. As has been repeatedly demonstrated, the longer the buildup of greenhouse gasses is allowed to continue, the worse will be the harmful effects on human wellbeing and the greater the costs of preventing still worse future impacts. Anticipated harm will take the form of rising sea levels, drought and floods, damaging fires, extreme weather, melting polar ice caps and glaciers, and crop failures. At some point thresholds of irreversibility will be crossed, and the fate of the human species, along with that of most of nature, becomes negatively determined beyond easy alteration.

American Leadership: For What?

There are many factors that have contributed to this policy stalemate. Among the most serious is the decline of responsible American leadership. Ever since the Copenhagen fiasco American leverage has been used irresponsibly, mainly to oppose climate change ambition in international negotiations and block efforts to impose obligations on governments that relate to the emission of greenhouse gasses. In an atmosphere where adverse national interests and perceptions were difficult enough to overcome, the United States in effect has been insisting that constraining their pursuit for the sake of serving a widely shared understanding of the common good was neither politically feasible nor desirable. The policy of the U.S. Government was in large part a reflection of the political climate in Washington that had become hostile to international commitments of almost any kind. This Washington mood especially opposed any undertaking related to environmental protection, which were automatically regarded as anti-market. In such a policy context in which the United States as global leader and leading per capita emitter refuses to take a responsible position, it is certainly not in a position to encourage others to act responsibly. It is evident that without geopolitical leadership with respect to climate change policy, selfishly conceived national interests with short time horizons, will carry the day, and the world will continue to drift disastrously toward a hotter future.

After being reelected in 2012 Barack Obama has been making the urgency of national and global action on climate change a rallying cry of his second term. In June of this year he gave a commencement address at the Irvine campus of the University of California in which he urged the graduating students to demand more responsible action on climate change by their government, especially by Congress, as crucial to obtaining a hopeful future for themselves. The students and their families present at the graduation ceremony received such a message with enthusiastic applause, but there is little reason to be hopeful that Obama on his own will be able to turn the tide in Washington sufficiently to restore confidence in American leadership with respect to climate change either at home or abroad.

The issue is particularly timely as the world is gearing up for a 2015 global meeting of governments in Paris that may represent the last real opportunity for collective action on a global scale to slow down the march toward species decline, if not oblivion, in an overheating planet, perhaps a moment of truth as to whether the coordinated behavior of governments is capable finally of serving the planetary public good in relation to climate change. According to ‘Giddens Law’ by the time the public will awaken to the seriousness of the global emergency it will be too late to reverse, or even manage, the trend. Obama at Irvine put this same issue more conditionally: "The question is whether we have the will to act before it is too late." Such a question is itself enveloped in clouds of unknowing as there is no way to be sure in advance when it becomes 'too late.'

The Market Awakens?

Despite this recital of discouraging aspects of the national and global response to climate change, I believe for the first time in this century that there may be reasons to be guardedly hopeful, maybe not in relation to what kind of global compact will emerge in Paris, but with respect to a tectonic shift in how the climate change challenge is being understood by the public and by hegemonic elites, especially in the globalizing domains of high finance and transnational corporate operations. Publication of a report in June 2014 playfully named Risky Business might at some future date be acknowledged as prefiguring a basic change in the political atmospherics relating to climate change. The visual iconographic adopted to introduce the report is indicative of its message to the society: a disabled theme park roller coaster inundated by rising coastal waters. Such an image expresses the idea that commercial property is at risk due to a disregard of longer term impacts attributable to global warming, suggestive of the sort of devastation experienced by the American northeast coastline in 2012 due to superstorm Sandy.

Risky Business explains and analyzes impending economic burdens on American business interests associated with continuing insufficient action on climate change. It is a think tank offering based on empirical research and risk analysis methodology that comes with the imprimatur of a self-anointed group of high profile economistic figures with impeccable private sector credentials. The chairs of this blue ribbon American effort were Henry Paulson, Secretary of the Treasury under Bush during the deep recession, Michael Bloomberg, former Mayor of New York City and environmentally oriented billionaire, and Thomas Steger, a prominent former hedge fund manager, identified as a major donor of the Democratic Party. Among these ten business world notables, an establishment mix of conservative and mainstream heavyweights, whose role seems to be to lend legitimacy and visibility to the report and its assessments. Thres of the ten are former secretaries of the treasury (Paulson + George Shultz, Robert Rubin), several business leaders connected with big corporations, including Gregory Page the ex-CEO of Cargill, the worldwide agribusiness giant, three political figures who have held important government posts in the past, and Alfred Sommer, the former dean of the School of Public health at Johns Hopkins. In keeping with the national focus of the undertaking, the global dimensions of climate change are completely ignored, and all ten endorsers are American. This self-consciously nationalist assessment of what is in its essence a global challenge is somewhat puzzling, and nowhere explained.

In his Irvine commencement address Obama quotes approvingly Woodrow Wilson's remark: "Sometimes people call me an idealist. Well, that is the way I know I am an American." Obama adds his own emphatic affirmation by way of echo: "That's who we are." In contrast, the tone and rationale of Risky Business is not idealist, but rather 'sensible' and 'prudent.' It is not dedicated so much to doing what is right for the country as it is to doing what is deemed beneficial for the future of the American economy, and helping to realize the central goal of business--maximizing benefits from the efficient use of capital. The report is realistic in style as well as substance--doing its best to avoid being 'political.'

In this spirit Risky Business deliberately refrains from offering policy recommendations, presumably to avoid seeming partisan or pushing ideologically sensitive buttons. There is a claim made by the authors that their analysis is meta-political (quite a political novelty these days), and that its recommended approach should appeal to everyone concerned with the health of the American economy regardless of their political persuasion. As indicated, the report somewhat artificially looks at climate change exclusively through a national lens. It offers no direct commentary on the global aspects of the climate change challenge and even fails to offer any insight as what should be done internationally to lessen the adverse national economic impacts for the United States that can be attributed to the global mismanagement of climate change. The modestly framed objective of this report is to stimulate active participation by business representatives in debates about how to mitigate harmful climate trends.

Co-chair Paulson (of bailout notoriety) published a widely influential article publicized to coincide with the release of Risky Business, capturing attention with an unusally alarmist headline, “The Coming Climate Crash,” (NY Times, June 21, 2014) The piece summarizes the outlook of Risky Business, proposing a new attitude toward climate advocacy that could exert a major influence on the investment community, as well as among Washington’s think tanks and lobbyists, and hence, eventually, may even get a hearing in Congress. The main messages delivered in the report are that human-generated global warming is real and dangerous for the economy (and incidentally for human health), and that inaction and delay in attending to these risks will make the situation worse than it already is and much more expensive to control. The bottom line is that business and finance stakeholders should immediately enter the national policy debate as a matter of self-interest. If sufficiently heeded, such involvement is likely to change the balance of forces on Wall Street and in Washington, the two venues that count most in this country when it comes to the shaping of the government role in the economy.

Risky Business, in keeping with its outlook and patrons, adopts a risk management approach to climate change. It seeks to demonstrate the specific anticipated effects of unattended risks from warming trends on the economic wellbeing of eight distinct geographic regions that together make up the whole of the United States. Some regions in certain sectors will actually gain from climate change, while others lose, with the conclusion that the losses will far outweigh the gains. For instance, agriculture in northern states of the mid-West will benefit from longer growing seasons and warmer temperatures, while the mid-West and South will suffer from the increased heat and greater frequency of extreme weather events.

The report summarizes its outlook as follows: “The signature effects of human-induced climate change..all have specific, measureable impacts on our nation’s current assets and ongoing economic activity.” (p.2). In effect, these projected impacts are not treated as mere speculation, but are set forth as the reliable results of risk analysis that should be taken into account in business planning. The essential lesson to be learned is that “..if we act aggressively to both adapt to the dangers and to mitigate future impacts by reducing carbon emissions—we can significantly reduce our exposure to the worst risks from climate change and also demonstrate global leadership on climate.” (p.3) This sole reference to the ‘global’ sensibly presupposes that if the United States gets its national house in order it will likely regain its reputation and leverage as a responsible leader in global policy settings. The positive prospect of climate change adjustment is set off against a criticism of present complacency: “Our key findings underscore the reality that if we stay on our current emissions path, our climate risks will multiply and accumulate at the decades tick by.” (p.8) All of this induces the following conclusion: “With this report, we call on the American business community to rise to the challenge and lead the way in helping to reduce climate risks.” (p.9)

The auspices of Risky Business immediately gave the report a media salience and respectful reception that earlier more authoritative scientific studies along the same lines did not receive, including the exhaustively researched comprehensive reports of the United Nations Inter-governmental Panel on Climate Change (IPCC). Even the Wall Street Journal, a media hub for climate change cynics, took respectful note of Risky Business without recourse to its usual snide anti-environmental commentary. The report is arousing great interest by offering what amounts to a business friendly certification for counter-branding climate change. It offers a vivid alternative to the climate denial prescriptions being peddled by Koch Brothers/Tea Party/fossil fuel industry anti-environmentalism. By arguing that the failure to act now on climate change will in the future exact bigger and bigger costs on business as well as be harmful to society, the report overrides the contentions that regulating greenhouse gas emissions in the United States is unnecessary and if undertaken will put American manufacturing operations at a competitive disadvantage internationally. Risky Business supports the opposite position on the facts and their implications for government. Rather than leaving the private sector alone to sort out its own course of action, the report declares that it is in the interest of business to have the government set “a consistent policy and a regulatory framework” that will keep carbon emissions below dangerous thresholds.

If this recommended action is not taken, Risky Business anticipates annual costs to the country of several billion dollars arising from increasing heat, storm surges, and hurricane intensity, as well as projecting 10% reduced crop yields over and a 3-5% livestock production decline over the course of the next 25 years. The approach adopted is congenial to the hedge fund and shareholder mentality by stressing risk management as the prescribed pattern of response rather than advocating a carbon tax or market constraints.

In this spirit, attention is given to such an undertaking as the Ceres’ Investor Network on Climate Risk (INCR), which reports that already as many as 53 of the Fortune 100 companies have on their own adopted policies responsive to climate with an aggregate saving $1.1 billion annually, while reducing carbon dioxide emissions by 58.3 million metric tons (an amount equal to closing 15 coal-fired plants). In effect, smart business practices are already taking advantage of carbon-lite methods of production, although the scale is far too small and without overall direction provided by the government. This decentralized approach to the use of energy represents as indirect way of addressing carbon emissions that is seen as the essential feature of this self-management climate risk paradigm, and suggests that big business despite the clamor in Congress is being quietly and effectively enlisted in the battle against global warming. Whether this turn will be on a large enough scale without being reinforced by innovative government policies is an important issue to resolve, and Risky Business leaves little doubt as to its view that a more self-conscious approach needs to be centrally implemented as a matter of urgency. At this time, the benefits of this risk management approach seem quite marginal to the kind of public mobilization that will be needed, and this is precisely where Risky Business seeks to make its views felt among the constituencies that count.

Beyond Risky Business

The substantive challenge for the economy is clear: Given seemingly inevitable economic costs, how can such burdens be best addressed to lessen their harmful effects on business and finance. The central message of hope issued by Risky Business is that jobs can be generated (not lost) and GNP increased (not diminished) while at the same time doing what is needed to reduce carbon emissions by a sufficient amount to contain global warming within safe and prudent limits. Further, that all this can be done without requiring a carbon tax provided appropriate action is taken on a large enough scale in the very near future. This risk management approach is not just wishing global warming away while carrying on without any big adjustments. The report while avoiding policy recommendations does offer some prescriptive ideas about how to beat global warming without directly regulating carbon emissions. Among the ideas endorsed are taking such steps as investing heavily in the development of clean public transport systems, enhanced energy efficiency in industry, and increased energy conservation in building design and operation. These kinds of initiatives are all within the scope of what has come to be called ‘smart development,’ which is becoming the new fashion for demonstrations about how to make economic growth compatible with environmental sustainability, and doing so in ways that do not scare off the neoliberal elites that run the economies of the world primarily for the sake of private sector profitability.

The main arguments of Risky Business are complemented by a recent World Bank study with the relevant title, “Climate-Smart Development: Adding Up the Benefits of Actions that Help Build Prosperity, End Poverty, and Combat Climate Change.” The study puts forward the new enlightenment oriented claim that the intelligent application of reason enables society to have it all without disturbing the ideological status quo—nurture growth, eliminate poverty, deal with climate change. If the world begins to act prudently in the design of climate policy, there is nothing to worry about. Best of all, this kind of new thinking does not require any major ideological modifications in the capitalist worldview. It does call for an abandonment of what is referred to as “the tyranny of short-termism,” presupposing shareholder acceptance of longer-term planning that may have some negative impacts on near-term quarterly earning statements that have so far stymied most efforts to deal prudently with climate change risks. This kind of shift can be fully rationalized within the risk management paradigm, optimally adjusting business for profit to the new realities of global warming by adopting a new concept of ‘corporate time’ by which to maximize profit-making activity.

There are some further elements in this more hopeful approach to the climate change challenge. The development of huge natural gas deposits supposedly reduces by as much as 50% the release of greenhouse gasses. More importantly, a policy focus on cutting the emissions of what are called ‘short-lived climate pollutants’ (‘black carbon’- diesel fumes, cooking fires, methane, ozone, some hydrofluoride carbons) if implemented ambitiously is capable of lengthening the time available to make the more fundamental adjustments in the management of energy sources associated with the long lasting buildup of carbon dioxide in the atmosphere, including the expansion of reliance on low-carbon production technology and the expansion of renewable energy (solar, wind).

It does seem that Risky Business represents a kind of breakthrough in the national debate on climate change. When business speaks, America listens. The report aligns business with science and reason without an accompanying future scenario of economic decline or any questioning of capitalist dependence on environmentally damaging consumerism. It advocates sub-national understandings of the risks and responses based on the characteristics of eight specific geographic regions in the United States, which fits the remedy to the challenge in a more convincing manner than grosser templates. Indirectly, it posits an alternative both to the business funding of climate denial and to those who insist that the structures of national sovereignty and capitalism are incapable of dealing with the global challenges being posed by climate change. This more optimistic approach rests on the assumption that the risks are accurately measureable, and can be offset without incurring significant economic burdens if action is quickly undertaken both by the private sector acting on its own and by government acting to protect the national public good.

A Concluding Skepticism

There are several reasons to be doubtful about whether Risky Business is providing the country with a reliable roadmap. First of all, the failure to relate national policy to the global setting is a significant shortcoming with respect to assessing risks and costs. The level of global warming in national space is dependent on what others do as well as to what happens in the United States. If emissions are reduced globally in accord with scientific understanding, the anticipated national costs and risks will be far lower than if this understanding continues to be ignored. Also, it seems doubtful that rational argument alone can sway the fossil fuel establishment to stop muddying the waters of democratic deliberation by continuing to fund the climate denial lobby.

Risky Business completely ignores the potential roles of civil society in mobilizing a prudent and equitable response, and contains no consideration of how to distribute whatever burdens are present in a manner that accords with ‘climate justice.’ In the end, it is questionable nationally and internationally, whether a business-friendly win/win scenario for meeting the challenges of climate change can on its own save the planet from impending disaster. Nevertheless, Risky Business might be helpful in forging a national consensus, also being urged by President Obama, that rests on an acceptance of the understanding among climate scientists of the realities of human-induced global warming. We do know that in a capitalist society when business raises its voice the message gets delivered, but we also should realize that this voice should not to be trusted without the most careful scrutiny. A politics of suspicion is appropriate.

With this move from the top echelons of the business world, it is time for civil society to come forth with a response that does emphasize the global setting of national policy responses on climate change and seeks to inject the perspectives of the climate justice transnational movement into the policy debate. Part of this response also needs to consider such structural issues as the persisting dominance of sovereign states in the making of global policy relating to climate change, and the questionable capacity of neoliberal globalization to serve the human interest, including that of safeguarding the future.

What seems most hopeful is the growing public recognition of climate change as mounting a challenge to society, government, and the peoples of the world that cannot be evaded without producing severe future damage. Also encouraging, is the emergence of thinking about indirect and innovative steps that can be taken to improve prospects of reducing carbon emissions—encouraging public transport, systemic moves to increase energy efficiency in building and maintenance, and reductions in air pollution from short-lived pollutants (differing from carbon dioxide with its greenhouse effect lasting for thousands of years). Behind the edifice of analysis and prescription it remains obscure who will foot the bill, and without such awareness, the real political implications of what Risky Business is proposing are uncertain.